611.9131/129
Memorandum of Conversation, by the Assistant Chief of the Division of Commercial Treaties and Agreements (Deimel)
| Participants: | The Iranian Minister |
| Mr. Paul H. Alling, Mr. Gordon P. Merriam, NE | |
| Mr. Deimel, TA |
The Minister called by appointment for an informal discussion of various points raised in the Iranian draft proposal for trade agreement general provisions submitted some weeks ago by the Minister86 as well as received (with some minor differences in translation) from the American Legation in Teheran.87
It was understood that the present discussions were of a tentative informal nature with a view to clarifying the situation for more definite action. Our procedure in the negotiation of trade agreements, particularly in regard to the necessity of obtaining the approval of the Trade Agreements Committee prior to the requisite public announcement of intention to negotiate, were reviewed for the Minister.
The Minister was told that we appreciated and shared the evident desire of his Government, as indicated by the care with which their proposal had been drafted, to seek the conclusion of a useful trade agreement; and that there were several points in the Iranian proposal which it was felt might be discussed in an informal manner before bringing the proposal before the Trade Agreements Committee. These points were then discussed in the following order:
- (1)
- It was explained that the wording of article 14 which would set the equalization of trade between the two countries as an objective of the agreement would on general grounds not be acceptable; the Minister indicated that he would not expect any difficulty to the elimination of this provision with a view to emphasizing the increased interchange of goods as the essential objective.
- (2)
- It was pointed out that the proposed agreement lacked any very definite commitment for the stabilization of such tariff concessions as might be agreed upon; that while of course certain provisions for exceptions would be necessary, the general structure of the Iranian proposal seemed to allow too much flexibility: it was believed that the trade agreements committee would probably insist upon some more definite degree of stability which of course would apply reciprocally. The Minister indicated that he did not anticipate any great difficulty with his Government on this score.
- (3)
- The Minister’s attention was called to the monopoly article in our standard draft general provisions with which he was familiar, [Page 689] and it was pointed out that the Iranian draft failed to contain any such provision. The Minister expressed the hope that this point could be left out since it was felt by his Government that any restrictions as to action by the Government in its own operations would be an unjustified limitation of its sovereignty. It was explained to him that the general purpose of the monopoly article was merely to assure fair and equal treatment of our trade in the general operation of government monopolies and that because government monopolies were of some importance in the Iranian economy it appeared unlikely that the Trade Agreements Committee would be willing to forego some sort of assurance in this regard. The Minister mentioned our own Government’s position in regard to the export of war materials, et cetera, and indicated that he thought it would be difficult for us to live up to the provisions of the standard article; he stressed the opinion that his Government would be unwilling to tie itself up with regard to the operation of its monopolies and intimated that the difficulty probably lay in the dependent position of Iran in its relations with Soviet Russia.
- (4)
- With reference to the proposed exchange control commitments in article 6 of the Iranian draft, it was pointed out that the blanket exception with respect to countries having compensation or clearing agreements with Iran was too far reaching; it was recognized that this question afforded a problem of some difficulty but that any exception which might be made would have to be developed in much more definitely restricted fashion, and would probably have to be formulated upon an actual detailed study of the compelling circumstances. The Minister gave an explanation of the Iranian position, referring primarily to Germany and Soviet Russia, the gist of which was that the problem lay in the specification of exchange rates in the clearing agreement with Germany and in the fact that the Soviet Government had no free currency.
It was agreed at the conclusion of the discussion that it would be desirable, in the light of this explanation, for the Iranian proposal now to be submitted definitely to the Trade Agreements Committee for its consideration with a view to developing more clearly this Government’s viewpoint.
The Minister was told that we would endeavor to obtain the views of the trade agreements committee on the matter as promptly as possible.